SIEMENS

Kibbutz Ketura has seen the light and discovered that it is inexhaustible and free. All its residents will have to do is locate their solar panels well away from the shade of their many date palms. Located in southern Israel, Ketura has already earmarked an appropriate site. With help from Siemens, a five-megawatt photovoltaic facility is to be built in the desert this year. And the facility could be expanded to 40 MW in the future. It will be the first-ever commercial photovoltaic plant in Israel — a country that has demonstrated that economic growth in this part of the world is possible, even without rich resources, by investing in high technology. The new plant will eventually be linked to a new high-voltage transmission line to Eilat, a tourism resort at the southern tip of Israel.

Here in the Arava, a desert region between the Red Sea and Dead Sea, conditions for solar power couldn't be better. The region enjoys an annual average of 2,200 hours of sunshine per year, which is very much on a par with the Sahara. Germany, by contrast, only gets around 1,600 effective hours of sunshine annually.

The Arava administrative district accounts for 13 % of Israel's total surface area, yet is home to only 3,000 people. Many of them live in kibbutzim — communal settlements originally based on an economic model inspired by socialism. Yet they haven't proved immune to the forces of social change. In recent years, in fact, some kibbutzim have blossomed into tightly run, highly profitable business enterprises that are prepared to invest in future-oriented industries. Ed Hofland, Chairman of Arava Power, himself a member of Kibbutz Ketura, explains that Arava Power has managed to persuade 15 other kibbutzim to partner with the company and enjoy the benefits of solar power and the associated earning opportunities. They have agreed to lease land to Arava Power, which wants to build photovoltaic plants.

Founded in 2006, Arava Power is owned by Global Sun Partners, Kibbutz Ketura, Siemens, which holds a 40-percent share, and a number of other investors headed by Yosef Abramowitz, President of Arava Power. The network of solar plants will be lucrative for all concerned, in addition to helping Israel cover its growing power needs. Diversification into renewable energy will help to ensure a more secure supply of electricity in the region. In 2008 Israel was still meeting 99 % of its energy requirements with fossil fuels. The country hopes to cover around 10 % of its power needs with renewable energy by the year 2020.

In late 2009 Israel passed legislation that creates incentives in the form of feed-in tariffs. Building on this, by the end of this year Ketura hopes to supply energy to the Israeli power grid. Apart from the solar panels themselves, which are being supplied by China's Suntech, almost all the components for the first plant will come from Siemens. As engineering, procurement and construction partner, the company will be responsible for overall project execution, from basic design to delivery of a turnkey solution with performance ratio contracting.

Siemens' investment in Arava Power, which totals $15 million, is being handled through its holding company, Siemens Project Ventures (SPV). “It's the biggest foreign investment ever made in an Israeli solar power company,” reports Johannes Schmidt, CEO of Equity Investments & Project Finance at Siemens Financial Services.

Mike Green, Chief Electrical Engineer of Arava Power, sees significant environmental benefits deriving from the project. The Red Sea resort of Eilat, about 50 km south of the kibbutz, needs around 200 MW of power, most of which is now transmitted from the north of the country. In the future, this demand could be increasingly covered by solar power generated in the Arava desert region. “I'm proud to be a pioneer for green energy in Israel,” says Green. “My hope is that this will be the beginning of a big future for renewable energy here."